Australian Dollar (AUD) slides as inflation misses forecasts
The Australian Dollar (AUD) stumbled out of the gates this week after Australia’s latest monthly inflation reading printed at -0.1%, boosting bets on coming interest rate cuts from the Reserve Bank of Australia (RBA).
In addition, a gloomy market mood through the European trading hours pushed the risk-sensitive ‘Aussie’ even lower.
After this morning’s finalised services PMI results, the Australian data calendar is thin for the remainder of the day. As a result, risk appetite could drive the ‘Aussie’.
New Zealand Dollar (NZD) falls following downbeat trade data
The New Zealand Dollar (NZD) also faced headwinds yesterday as new data showed New Zealand’s terms of trade soured dramatically at the end of 2023, with export prices slumping while import prices rose.
The risk-sensitive currency then came under additional pressure as market sentiment deteriorated.
Turning to today, New Zealand data is in short supply, which may leave the ‘Kiwi’ vulnerable to any shifts in global risk appetite.
Pound (GBP) firms following investment announcement
The Pound (GBP) found success during yesterday’s European trade, as Chancellor Jeremy Hunt trailed some investment plans ahead of his Spring Budget.
Hunt announced £360m in funding for the UK manufacturing industry, as the Treasury tries to kick-start growth in the British economy.
Looking forward, the UK’s final services PMI due out this evening could impact GBP. Will confirmation of another strong expansion in the service sector boost the Pound?
Euro (EUR) limited ahead of ECB decision
The Euro (EUR) managed to rise against its weaker rivals yesterday but struggled to make gains elsewhere as a lack of Eurozone economic data stifled the currency’s potential.
Additionally, EUR investors were likely hesitant to adjust their positions ahead of the European Central Bank’s (ECB) interest rate decision on Thursday.
The Eurozone’s final service sector PMI will also be published this evening. Confirmation that business activity avoided a contraction last month could lend EUR modest support.
US Dollar (USD) muted amid lack of data
The US Dollar (USD) fell against its stronger rivals yesterday as a lack of US data left the ‘Greenback’ without much support.
However, the safe-haven currency was able to firm against its riskier rivals amid a cautious mood among investors.
Overnight, the latest ISM services PMI is in the spotlight for USD investors. An expected slowdown in activity could put pressure on the ‘Greenback’.
Canadian Dollar (CAD) subdued amid unclear oil prices
The crude-linked Canadian Dollar (CAD) softened yesterday as choppy oil prices and a lack of Canadian data left the currency exposed to losses.
Canada’s own services PMI will be released tonight, with a forecast contraction potentially creating headwinds for the ‘Loonie’.
Data Releases
Mar 5th 19:00 EUR Services PMI (Feb) 50
Mar 5th 19:30 GBP Services PMI (Feb) 54.3
Mar 6th 00:30 CAD Services PMI (Feb) 46.5
Mar 6th 01:00 USD ISM Services PMI (Feb) 53